Tesla Reports Record Annual Profit of $5.5 Billion

Tesla (TSLA) expectedly outperformed market analysts' forecasts in earnings, thanks to record sales of electric vehicles. However, Tesla's supply chain problems will prevent it from introducing new models in 2022.

Tesla on Wednesday after the close of trading on Nasdaq announced its financial results for the 4th quarter and the entire 2021 and announced forecasts and plans for 2022.

Shares of Tesla (TSLA), down 11.3% year-to-date, initially fell 4% post-market but stalled at -0.8% as a result.

Tesla report

Q4 earnings per share jumped 215% year-over-year to $2.52, above analysts' average forecast of $2.36.

Quarterly net income hit a record $2.32 billion compared to $270 million in the same quarter of 2020.

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Total revenue rose 65% to $17.72 billion vs. analyst estimates of $16.57 billion. Quarterly revenue and earnings statistics on the Tesla Reports page.

At the end of 2021, total revenues increased by 71% to $53.82 billion, and profit to $5.52 billion compared to losses in 2020.

Annual shipments of all Tesla models: Model S, Model X, Model 3 and Model Y for 2021 increased by 87% to 936,222 from 499,647 units in 2020.

Good news

In addition to the record pace of production and sales of electric vehicles, Tesla management noted a number of other achievements:

  • The Fremont, California plant has reached record levels of production with plans to increase capacity to 600,000 vehicles a year.
  • Production of both the Model 3 and Model Y at Tesla's Shanghai plant continued to rise throughout 2021.
  • Tesla began production at a new facility in Austin, Texas in late 2021, saying customer deliveries will begin shortly.
  • At the new plant in Texas, Tesla will produce Model Y with new batteries.
  • Gene. CEO Elon Musk remains confident that Tesla will have truly self-driving technology by the end of 2023.

An experimental test program for Tesla driver assistance systems, called FSD Beta, has reached approximately 60,000 users in the US.

“Software for full self-driving (FSD) remains one of our core businesses,” the company writes. "Over time, our software-related profits should increase our overall profitability."

Musk also said that the humanoid robot, designed to “eliminate the dangerous, repetitive and boring tasks humans do today,” unveiled by Tesla in August 2021, could grow into a bigger business than the company’s car business over time.

The company reiterated its expectations for a long-term increase in average annual vehicle deliveries by 50%. The table below shows the current annual production rates at Tesla factories.

Tesla Reports Record Annual Profit of $5.5 Billion

image source: Tesla press release

Bad news

Tesla's shareholder report states that "factories have been operating at less than full capacity for several quarters as the main constraint has been the supply chain, which is likely to continue through 2022."

Due to limited supplies, Tesla will not release new car models this year but will focus on ramping up production at new factories in Austin and Berlin.

The Tesla plant in Brandenburg, Berlin, is in the testing phase of vehicle manufacturing equipment and is still in the process of obtaining production approval from local authorities.

With Tesla confirming rumors that the Cybertruck won't launch until 2023, and with the company facing supply chain challenges while doing the difficult job of bringing new factories to scale, 2022 is shaping up to be a challenging year.

Add to that the rise in Fed interest rates, Tesla may find it difficult to increase its profits from quarter to quarter.

Tesla shares have lost 23.8% since the November 4 high, arguments for the recovery of price growth may not be enough, although the company's business is moving in the right direction.

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